Skip to main content
3:00 pm
killed off apple blossoms all over the country. prices could jump $1 a pound at the grossry store. apple juice prices could jump as well. hoard apples and apple juice now. that was also a joke. thanks for watching. "closing bell" is next. welcome to the "closing bell." i'm michelle caruso-cabrera in for maria. >> i'm scott walker in for bill griffeth. bill and maria back here tomorrow. it must be monday because stocks are off to a slow start to the week with all three major averages in the red. investors staying cautious ahead of the start of earning season with alocoa set to report after the bell tomorrow. the outlook for third quarter earnings is pretty lackluster, so will we see the market adjust to that reality?
3:01 pm
we'll get into that. big question later on. >> meantime, nasdaq the worst performer today. due in part to the slump in apple shares. the stock now below $600 billion in market cap. more on appear until a moment but here are the major indices. dow jones lower by 25 points. 13,584. nasdaq negative by 24 points, 3,111. and the s&p 500 right now is also lower by nearly five points. that's a third of a percent. 1457 -- 1456. our next guest is making a staggering call. he says the world economy may be down for the count. that prognosis by brookings called tiger standing for tracking indice for global economic recovery. political conflict, lack of fiscal decision-making are two of the key reasons for the dire warning. >> how does this factor into the market? in today's "closing bell exchange," cornell university
3:02 pm
professor and senior fellow at brookings, which authored that very study. also with us are savita from merrill lynch. very strong language in the report, global economic recovery hits the ropes but you do make the point that the u.s. certainly looks better than everyone else. so, the key question is, can the u.s. avoid catching the world's cold? >> that's a literal statement. the u.s. looks better than other xhis in the world but it's not a great spot to be in. with the amount of policy and political uncertainty, the u.s. -- even the u.s. recovery staying strong is certainly not a sure thing. they'll be buffeted by headwinds from abroad because china and india are not doing well. even u.s. has a rocky road ahead. >> you go through nearly every region of the world and talk
3:03 pm
about all the negatives in every part of the world. is there going to be a global recession? can you put a percentage on it? what's your estimate? >> well, right now it's political and policy uncertainty that's really the big story in virtually every economy. central banks around the world have put a floor on risk, and that's what i think is helping financial markets stay afloat. if you look at the confidence indexes i look at in my overall index, that doesn't look good at all. consumers and businesses around the world seem to be very concerned about what's ahead. that's not a good story for domestic demand in any country in the world. >> you do have central banks active, though, all over the world. what role can that take considering what's happening here in the united states, qe3 recently announced, central banks active all over the place, looking to stimulate economies? as long as that is active, can we avoid a more worsening problem? >> here's the problem. central banks are being asked to do two very difficult things. one is to limit downside risk
3:04 pm
completely and the second is to promote growth. the problem is now that the burden is being put entirely on central banks, without other policies, fiscal policies, financial sector reforms, supporting central bank policies, central banking is not able to get traction in terms of supporting growth. it is limiting downside risk. right now i think that's the best we can hope for from central banks around the world. to but a floor on risk. supporting growth, i don't think central banks can do very much. >> your assessment of what eswar just said, are we going into a global recession? >> no, i don't think we're going into a global recession. i agree with what he has said about the weakness in the global economy. also a little about the u.s.'s sort of different position here. but i think the key thing is, is you don't need -- i don't think central banks are effective at stimulating growth in the developed world at all but i think there's a lot of pent-up demand, particularly in the u.s. economy, helping the auto and housing industry pull back, so i
3:05 pm
think the u.s. economy can prove -- i think they can weather the bad policy decisions made to this point. i think the u.s. can grow through this. i think the world economy overall is slower because of these policy mistakes. again, the other thing is, as an investor, you've got to recognize that a lot of markets have already more than priced this in. stocks are cheap around the world and cheapest outside the united states. >> i guess you would completely disagree with the findings here because your s&p target, as i see it for the end of next year, is 1600. so you're looking for i fairly robust market. >> we're looking for the s&p to make new highs. i think that's achievable. i agree with eswar as well. i think there is a lot of bad news out there. but i think that most of that bad news is priced into the market. in particular, the u.s. equity market. i mean, we've been bullish on equities this year because of the fact that if you look at wall street strategist, equity allocations, they're the lowest they've been in over 25 years. so, i think there's a lot of negative sentiment built into
3:06 pm
the market already. valuations are still very supportive. and i do see the u.s. as the area of relative strength in the global economy. >> we're going to see new highs for the s&p 500, which stocks or sec are tors within it are the areas pushing the averages to new highs? >> i think that leadership in the market is going to be very different from what we've seen over the last decade. i think it's going to be the opposite. so, it's going to be the big cap cash-rich, kind of the anti-credit sensitive sectors of the market that lead the market to new highs. this means high-quality, large-cap stocks could actually lead the market. that looks very different from what we saw over the last ten years but could be accompanied by a pretty strong equity market return. >> david, no one is talking about the election and what that could mean depending on the outcome, right? >> well, yeah. the outcome of the election is important in terms of taxation of returns and stocks. but also, i mean, you know, we are buffeted by this uncertainty right now. one thing we can be pretty sure of is six months from now we'll
3:07 pm
know a lot more about u.s. fiscal policy going forward. i think we'll avoid the fiscal cliff but i think just having some clarity on taxation in the long run and spending in the long run should further help the u.s. economy. so, i do feel a little more positive about the u.s. economy. i agree, you know, in general with this panel. we're pretty much in agreement that the u.s. should do a little better here. as an investor, you know, put money to work in u.s. centric stocks. i think that can really help. >> lady and gentlemen, thank you so much. >> thanks. >> pleasure. >> 50 minutes or so to go before we close it up on this monday on wall street. dow jones industrial average down 20 points. nasdaq off 21. >> we've we know what you're asking, where's maria at the columbus day parade. doing her yearly hosting duties. she will not miss this show and she has none other than famed investor mario gabelli at the parade. >> that and a whole lot more
3:08 pm
ahead on this busy monday edition of "the bell." >> announcer: coming up, core problems? apple shares falling below a key technical level. is the world's most valuable company suddenly having an image problem because of the new iphone 5? we'll explain why straight ahead. plus, employment status. there's a good reason you may not want to let a prospective employer friend you on facebook. your new job could depend on it. also, stepping on the gas. why is the price at the pump still putting a hole in your wallet even as oil price continue to slide? that's all ahead on the "closing bell." improve our schools... ...what should we invest in? maybe new buildings? what about updated equipment? they can help, but recent research shows...
3:09 pm
...nothing transforms schools like investing in advanced teacher education. let's build a strong foundation. let's invest in our teachers so they can inspire our students. let's solve this.
3:10 pm
3:11 pm
welcome back with about 50 minute to go in today's trading session. time for a quick market stat check on the dow. industrials trading in a tight 58-point range. ahead of tomorrow's unofficial start of earning season. right now, get a check of the dow here. it is down about 20 points. the dow is trying to avoid its 17th down monday in the past 19. the cboe's volatility index has
3:12 pm
been up all day. the vix a bit north of 15. on pace to close above that level. we can't get many monday winners. >> no. but you know what's a big winner? it's columbus day and is tradition maria hosting the columbus day parade today and joining us with a special guest, mario gabelli, also the grand marshal. marie, you looked great on that car. >> thank you. we're celebrating columbus day. mario gabelli is the grand marshal for the weekend. he's been marching, shaking hands, saying hi to everybody. it's been a fantastic day. the parade just ended. the honorees were bob nardelli, who, of course, former ceo of home depot, anthony scaram. chi and the leading army
3:13 pm
executive in the country, really has put his life on the line as well as new york city police chief jim esposito. thanks for joining us. >> it's a great day. thanks to be here and talk to you. >> how important was it -- how does it feel to be grand marshal of columbus weekend? what does it mean for you, a man who started his own business from the ground up? >> you think about 520 years ago, columbus had a vision, he was an entrepreneur tried to do a venture capital deal with the queen of spain. more fundamental it lays the track of what u.s. is all about. the rule of law, the free market system, even with all the blemishes of the last few years, and then the ability to succeed and the vision of columbus and what we're doing here with this parade is to raise millions of dollars, which we do every year, and give it back to individuals that want to have an equal opportunity through school. we give that money to students,
3:14 pm
thousands of them, maria, and that's why i'm doing this. i want to continue to help contribute. >> you constantly give back. the money raised, $2 million for scholarships for students, for grammar school, high school, college. were you -- were you on the phone at all? were you checking in with the office? i mean, the market is open. you've got $36 billion in assets under management. how did you take the day off? >> it's never too late to give, so everyone that's listening today, you know, take some of that capital gains and give it to a charity you like and make sure it's focused on education and whatever else you're passionate about. that's what counts. >> let me ask you about -- >> and better than -- yeah. >> let me ask you about the market because the earnings period is about to start tomorrow night when alocoa reports. what's your take on where we are in terms of putting money into the market today? >> the whole notion of earnings, we do know 25% of the world's $75 trillion gdp is europe. the southern part of europe has had a challenge.
3:15 pm
europe has had a challenge. and then secondly the u.s. dollar is pretty strong relative to euro, so you have a -- >> we're having a little technical problem there. we'll try to get that fixed. we could hear them but we couldn't see them. always a problem in television. stick around. >> we have about 45 minutes or so to go in today's session. let's take a look at where we stand. the dow cut its losses, down 13 or so points. nasdaq down two-thirds of 1%. it's a wait and see kind of a market. >> fifth avenue is so far away, you just -- satellite connections. very unloved stocks making waves today. netflix upgraded to buy. hewlett-packard calling for a breakup. >> it seems like lawmakers in washington can't agree on anything these days but they're finally reaching across the aisle to take on a huge chinese tech company our lawmakers say is a threat to national security. someone from that company is
3:16 pm
here to defend it coming up. ♪ [ male announcer ] how do you make 70,000 trades a second... ♪ reach one customer at a time? ♪ or help doctors turn billions of bytes of shared information... ♪ into a fifth anniversary of remission? ♪ whatever your business challenge, dell has the technology and services to help you solve it.
3:17 pm
whatever your business challenge, mike rowe here at a ford tell me fiona, who's having a big tire event? your ford dealer. who has 11 major brands to choose from? your ford dealer. who's offering a rebate? your ford dealer. who has the low price tire guarantee... affording peace of mind to anyone who might be in the market for a new set of tires? your ford dealer. i'm beginning to sense a pattern. buy four select tires, get a $60 rebate. use the ford service credit credit card, get $60 more. that's up to $120. where did you get that sweater vest? your ford dealer.
3:18 pm
let's get back to maria. i'm back with mario gabelli. i'm sorry about that, in the middle of the conversation the satellite went down. you were talking about earnings as far as putting money into the market. $36 billion under management. it's all in equities in your company. >> that's what we do. obviously, from the point of view of being loyal to the money
3:19 pm
that's with us, that's what we focus on. every day we read an annual report -- for instance, yesterday, i read the annual report of a company spun off from sara lee, called hillshire, that's going to be very attractive. it's a yummy. somebody will want to buy it, jimmy dean, hillshire brands, ballpark franks. >> consistent growers regardless of the economic back drop around you. do you worry the economic backdrop has actually worsened? that this market keeps going up and we're heading into the earnings period which is actually going to show contraction? >> the market does fluctuate. you know, 50, 60 years ago bernard veruke said the market goes up. yeah, the markets will fluctuate. we can't worry about that. that's background noise. what's it going to look like in five years?
3:20 pm
short term the markets had a big rally. you want to keep your seat belts fastened. next 35 days in united states deleveraging on a global basis and a lot of speed bumps. >> any anticipation going into the election? does that dictate how you're allocating money right now? >> like any other business person, i'm looking at what happens after the election, so i have to have options. during this period of uncertainty i'm not pulling the trigger, so i'm not hesitating. do i raise capital, make a dividend, make a distribution, buy back stock? larger companies are looking at simple things like making acquisitions, splitting up the companies. i think that's on hold. for example, the warren act preshrepr precludes individual companies from saying, we can't lay you off right away, sequestration issues. lots of uncertainties that can be clarified after the election. >> in terms of m&a, you think it's going to pick up after the
3:21 pm
election? >> absolutely. smaller companies that are unique and have certain characteristics and an opportunity -- water-related, fracing, health care, banking industry is starting to look at deals. as you look into 2013, you want to say, hey, i can borrow money. i'm an lbo firm, private equity has lots of money. they can borrow money cheap. stocks are cheap. if they get cheaper, you'll see more deals. >> going into the election, that sequestration, the fiscal cliff, how important is this in terms of investing? >> even the martians know about sequestration. it's nothing new. but the answer is, if it happens, you may have another issue because it does create a speed bump in 2013. looking into 2014, if we can pull it off a year from now -- a year from now at this date, 2014 could be very bright. >> all right. we'll leave it there on that bright note. mario gabelli, chairman and ceo of gabelli funds and this year's
3:22 pm
grand marshal for the columbus weekend. thanks, mario. >> great to be here. great to raise money for the great cause of education and everyone's dreams. >> mario gabelli with me here in new york city. michele, i'll be back on the "closing bell" tomorrow and i'll send it to you for now. >> tell mario he looks great in a sash. oil and gasoline futures falling today. will we see gas prices at pump follow suit? sharon epperson at the nymex with the details. >> we're finally seeing, michele, some relief here in terms of gasoline futures prices. the first loss we've seen in about three days' time. meanwhile, it's a mixed picture in the oil market. u.s. oil prices are lower but we're looking at brent crude holding pretty steady here. in light of what has happened in california in the last 24 hours, the fact the california governor put in the ability to have winter grade gasoline there a little earlier than usual, that may be something that's causing gasoline futures to fall. but we are looking at prices at the pump. some say could drop also.
3:23 pm
really depends on what happens there. that's the wild card that could send prices higher through election day. back to you. >> you can have all the oil you want, but you can't process it. what's the point? thank you. why aren't gasoline prices coming down as fast as oil prices? we'll hear from somebody that says it's because of something that hasn't happened in over 70 years. two big stocks, two big calls. netflix shares are up after morgan stanley upgraded it to overweight. ubs recommending hp, hewlett-packard, should break up into two businesses. an enterprise business and pc printer business. given both stocks are down some 40% over the past year, either beaten down name a buy right now? it's hp versus netflix as we start ta"talking numbers." carter worth from oppenheimer and on the fundamental side
3:24 pm
charles notel. let's look at the numbers. until recently these charts tell a different story. in the last week alone, netflix has rocketed higher. >> hlet's stay it didn't say hewlit on there, we would say bad doughnuts, bad cars, something's not right. pretty bad downtrend. we would not do that. that's why they call them value traps often. the other one is no party either. take a look at netflix. i mean, 300 to addition. >> i'm referring to this little -- >> that's maybe something to get -- i would say all it does is return the stock to a very difficult level where people who have been trapped are happy to get some money back. >> charles, what's the story here, would you short either of these names? you can take netflix first. i mean, obviously, there's a been short interest to begin with. >> i absolutely with neither go short or long netflix. the story on netflix is old news, a crowded trade, too much
3:25 pm
there that would whip saw you. on the long side it's a very speculative long name. sure, some cash-rich companies could turn around and snap it up. i don't even see that happening. >> what's the skinny on hp? >> with hp, you know, thinking of kodak, it kind of reminds you of kodak. it's a large, too diverse company with way too many employees. that said, i think the management out there in california is drinking better water than in rochester. got a nice dividend at 3.6% yield, meg whitman is a smart person. hopefully she'll get things going internally or external events will lead investors up here. >> carter, thanks, as always. the dow jones industrial average right now is lower by 14 points. the nasdaq is lower by 19. we've got 35 minutes before the closing bell. mixed messages. why have stocks rallied into what is expected to be one of the worst earning seasons in years? should you protect your gains right now?
3:26 pm
that's coming up. first, it was problems with maps, then complaints about scratching. now the iphone 5 has a purple haze problem. no, not too much jimi hendrix. take a look at your screen. are apple shares in the iphone 5 being hit by death of a thousand cuts? tdd#: 1-800-345-2550 this morning, i'm going to trade in hong kong. tdd#: 1-800-345-2550 after that, it's on to germany. tdd#: 1-800-345-2550 then tonight, i'm trading 9500 miles away in japan. tdd#: 1-800-345-2550 with the new global account from schwab, tdd#: 1-800-345-2550 i hunt down opportunities around the world tdd#: 1-800-345-2550 as if i'm right there. tdd#: 1-800-345-2550 and i'm in total control because i can trade tdd#: 1-800-345-2550 directly online in 12 markets in their local currencies. tdd#: 1-800-345-2550 i use their global research to get an edge. tdd#: 1-800-345-2550 their equity ratings show me how schwab tdd#: 1-800-345-2550 rates specific foreign stocks tdd#: 1-800-345-2550 based on things like fundamentals, momentum and risk. tdd#: 1-800-345-2550 and i also have access to independent tdd#: 1-800-345-2550 firms like ned davis research
3:27 pm
tdd#: 1-800-345-2550 and economist intelligence unit. tdd#: 1-800-345-2550 plus, i can talk to their global specialists 24/7. tdd#: 1-800-345-2550 and trade in my global account commission-free tdd#: 1-800-345-2550 through march 2013. tdd#: 1-800-345-2550 best part... no jet lag. tdd#: 1-800-345-2550 call 1-800-711-5510 tdd#: 1-800-345-2550 and a global specialist tdd#: 1-800-345-2550 will help you get started today.
3:28 pm
3:29 pm
apple stock getting hammered again today. bertha at the knack das. >> apple stock was down two weeks in a row. and today it actually slipped below 640. it's trading weak below the 50-day moving average. despite the fact we keep getting more news, that it's moving toward with the ipad mini. they project 10 and 15 million in the fourth quarter. as far as the stock's breakdown, he thinks it's a consolidation period like last summer. the circle on the right is where we are now. the circle on the left is when
3:30 pm
that happened at end of july. stock rose another 23% from there before topping out at 705. we'll see if history repeats. maybe this has something to do with why apple shares keep falling. now more problems for the iphone 5. first the debacle over the maps app and then complaints about scratches on the aluminum casing. this time it's over a purple flare that appears on photos taken with the camera whenever it's pointed toward a bright light. apple says it happens to other phones and users may be aiming it wrong. as you can see from this image from mashable, it only appears, in these photos, in the new iphone. >> in the wake of these issues, apple with the latest product, the iphone 5, face an image problem? maxwell from greencrest capital thinks so but todd hayes says these aren't a big deal. max, you make the case, why is this a problem? >> i think it's a problem because apple is beginning to
3:31 pm
lose its halo. >> it's got a new one today, purple. >> yeah, involuntary. unfortunately it doesn't extend to the stock. we like the company. we think it bounces up from where it is. that being said, they started to take down their brand. the 5 is a catch-up problems with problems with the case, problems with labor, the camera. now they have to be absolutely perfect in this mini launch at the end of the month or they'll have two problematic launches in a row which puts them very likely to top out late in this quarter or early next quarter. then have eroded their halo and face a more competitive market going forward with heavy entry from people like amazon and google who have a long history of breaking down margins in every area they enter. >> sounds like we're talking about two entirely different companies. i'm looking at a company that sells out of every single new product it makes. whose stock price, for the last week or so, continues to go up and now the most valuable
3:32 pm
publicly traded company on the planet. so, i wish we all that-h that image problem. >> sure. it's the greatest marketing company in the world. i certainly concede it's agood product. >> it's a product company. let's be honest, right? >> it's a product company, a marketing company, too. that's what the lines are about. that's why new product launches get media few tear but they have to be superlative to merit the attention and price they demand so the question is the halo purple when it used to be white? >> todd, you heard the case. do you agree? >> no, i don't agree. we're seeing fans taking -- going after the best product on the market right now. arguably one of the best. i think the galaxy s3 is up there with it. we're seeing small problems that not everybody sees. i own an iphone 5 and i haven't seen the purple halo. the scuffing. it's aluminum. that happens. i think we're being unfair to apple. we're going after the top dog
3:33 pm
and making up these issues. sure, it's there but not the biggest problem. we had antenna gate, that didn't ruin the iphone 4 or s. i think we should be careful how far we go. >> isn't that true? everybody talked about the antenna problem, calls being dropped with the iphone 4 -- >> steve jobs came back from vacation in hawaii for the press conference. it was crazy. >> who's talking about that now? >> absolutely. but the both bottom line is, you don't have the halo effect on the ceo up. have the problem with the mapping apps, the labor problem with foxconn getting worse, the scuffing, which is minor, the camera which i agree is minor. it's a question of additive. it is the top dog and that's why people talk about it. but they also talk about it because it's hard to stay the top dog -- >> but do you think ultimately people stop buying the product because of all these things? >> no, i don't think they'll pay the premium going forward if you have two products with some problems in the launch, even if those problems are minor. >> it's still sold out
3:34 pm
everywhere. >> that's part of the marketing. >> i don't think so. i think we're little -- we might have shortages of components, the in-cell displays. maybe it's a supply yishgs not a demand issue. >> when is the last time apple had a product that wasn't shortage? >> it's part of the marketing. >> it's probably not an accident every time. >> max, you're not -- you're not knocking tim cook's performance, are you? certainly for investors, he's performed beyond their wild expectations to this point in basically a day more than a year since mr. jobs passed away? >> i think he's an excellent ceo. he's done a great job. i think the share prices tell that story, profit margins, i think he'll continue to tell the story. the question is whether he keeps the halo, which went white to purple. if they don't nail the mini tablet, they'll have a problem with the halo. they'll be the best producer, still have lines, still be a favorite, still trade at a lower multiple than cash suggests is
3:35 pm
possible. the question is, can you stay number one forever and is everything you do perfect, at least in your marketing? it looks to me like there's a little slip from that position on anything they do is perfect. >> let me get -- i know we have to run but says you're a senior analyst. does that mean have you a price target and rating on a stock like this? >> we don't do forward price targets on any of the names. >> just wanted to see if you did. >> gentlemen, thank you. >> thanks for having us. >> thank you. >> guys, we have 25 minutes to go before the bell rings on this columbus day. markets are in the red. waiting for earning season. >> earning season kicks off tomorrow. analysts don't think the numbers will be pretty. what will that mean for the stock market? that discussion is next. >> oil prices falling like a stone in the past two weeks. not gasoline prices. they're flat. are we getting ripped off at the pump or is there something more behind this disconnect? >> announcer: first, before we go to break, the dividend. which company's stock is outperforming this year? darden restaurants, mcdonald's
3:36 pm
or yum brands. the dividend pays off after the break.
3:37 pm
♪ chances are, you're not made of money, so don't overpay for motorcycle insurance. geico, see how much you could save. the potential of yelp unlocked. nyse euronext. unlocking the world's potential. to a currency market for everyone. the potential of fxcm unlocked. nyse euronext. unlocking the world's potential.
3:38 pm
c'mon, michael! get in the game! [ male announcer ] don't have the hops for hoops with your buddies? lost your appetite for romance? and your mood is on its way down. you might not just be getting older. you might have a treatable condition called low testosterone or low t. millions of men, forty-five or older, may have low t. so talk to your doctor about low t. hey, michael! [ male announcer ] and step out of the shadows. hi! how are you? [ male announcer ] learn more at isitlowt.com. [ laughs ] hey! just before the break as part of "the dividend" we asked which company's stock is outperforming this year?
3:39 pm
darden restaurant, mcdonald's or yum brands. now the payoff. darden, which has shot up about 20% year to date. welcome back. nearly 6% of the stocks in the s&p 500 hit all-time highs on friday. and a handful came from the energy and utility sectors. jackie joins us with those details. >> good afternoon. before we get to the names, i want to take a look at broader performance in energy and utilities because the story we see there is a tale of two sectors, if you pardon the pun. s&p 500 energy sector, up roughly 11% in the last three months, outperforming the broader index and second best performing sector overall. the utilities have been flat and are the worst performer for the time period. having said that, one of the standout performers that has bucked the trend in the utility sector has been one oak, investors liking this utility company because of the 33 cent dividend and projecting a dividend increase next year and a company with potential for
3:40 pm
growth. energy, dow components, chevron and exxonmobil have had stellar performance as of late. chevron hittingen all-time high in september. finally, cabot oil and gas, trading at all-time highs not seen since ipo in 1990. these are some names to watch. you know what, analysts out there saying they're not overbought at this point. continue to watch them grow in the future. >> thank you, jackie. so, will so many individual stocks keep making all-time highs in this environment? >> with us today are sam stovall and our own bob pisani. sam, it's going to come down to earnin earnings, right, which starts tomorrow? >> tomorrow. the bar is not just set low, it's set below, under water. >> below dirt. >> off the lows. capital iq is forecasting a 1.3%
3:41 pm
deline. it was down to 1.8%. big deal. i think some of the numbers underneath are a little more telling, such as right now the early beat ratio at 58% is below the average of 62%. in terms of guidance, those that are guiding negatively are 3.3 to 1 for those guiding positively. >> that sounds very negative for the stock market. >> well, i think it's baked in right now, or a lot of that is probably baked in. the real question is, whether we're likely to be seeing qe3 as the trough -- >> how can it be baked in if we're sitting at 4 1/2 year highs? how is that baked in? >> exactly. >> i think nothing is really new. what has come out yet that's going to tell us things are a lot worse than we anticipated? materials are expected to show 20% earnings decline. energy down 16%. >> bottom line, if earnings decline, why hasn't the stock market declined? >> i think what the stock market is doing is looking 6 to 12
3:42 pm
months down the road. it bottomed out in june of this year because it anticipates most of the global economies will be troughing in third, fourth quarters of this year, early next year, and so they're looking beyond this third quarter -- >> to answer the question. this is the trough right now. we're going to grow in the fourth quarter. now, even if you cut the estimates they've got in half, we'll still get 5% growth in the fourth quarter. we'll get growth this year overall, unless there's a disaster in the fourth quarter. 2013 is a little more murky. the other answer to your question is, because the federal reserve and the ecb are helping prop up stocks. that's a major factor. everybody knows it. i don't know how much you think they're propping up stocks. most traders i talk to believe it's significant. it's not a minor factor in the whole thing. the more important question is where you stand, sam o this whole issue of buying the u.s., home depot trade, buy auto, buy housing stocks, consumer stocks in the u.s. as a way to insulate yourself from the rest of the world. >> the dog with the least fleas. >> everybody's doing this trade for several months. while it's working, cyclical
3:43 pm
stocks are still outperforming, global cyclicals. >> i still think when you're dealing with stocks are you not dealing with a total isolation. what happens across the pond still affects what happens here. you still can look to the consumer discretionary, which is one of the two best performing sectors in terms of earnings expectations, financials being the second. you can say, well, it's because they have lack of international exposure. so, therefore, you don't get the 7% headwind we got on fx this year. >> my point is, you can say -- i think it makes some sense to say the u.s. is the best house in a bad neighborhood. that makes some sense to me as a trade. but with the fed in, the ecb in, you can see these global stocks continuing to hold up very, very well. i'm not sure it's necessarily obvious that -- just because fundamentally the u.s. might be a better place to invest right now, that doesn't mean the global stock market is going to fall apart. >> what about financials, what about select financials, regional banks, can we have an environment in the quarter where financials start to outperform? >> especially when central banks
3:44 pm
are depressing that yield curve, which is struggling so bad? >> i think we're starting to see it on a rolling 12-month relative base, financials are now above par, above parity, implying they're relative performance over the last 12 months has exceeded that for the s&p 500. and if you look to the smaller banks, you look to those that are actually starting to see an improvement in loan growth, they are starting to see an improvement in the debt writedowns, et cetera, really the question is, more focused on the global mega banks. those are the ones that get the headlines. >> what happened if the scenario laid out by brookings institution today in their report is calling for -- or that says the global economic recovery is on the ropes, that it could take a significant turn to the downside, that maybe people aren't focusing on the real issues in china, that the situation there could get worse, can we avoid all of that? >> can we avoid it? i would tend to say that what you're describing is a very
3:45 pm
fragile global economy, which i -- >> that's what we have. >> i totally admit to. right now we're looking at gdp growth even less than half of what it normally is in the fourth year of an economic expansion. so, at 1.3% annualized, you have to see a little hick hiccup, to your -- >> to your point, bob, that's what traders say the fed is for. >> we're troubled by the disconnect between the global, u.s. economy and the stock market. the fed f you're in the business of giving stock advice or helping people make money, have you to leave that -- leave that into your equation. have you to put the fed in your equati equation. >> it's the fed, the ecb, the pboc, i mean, it's a global initiative. >> that's a good point about the pboc. people may have ideological problems with it, everyone has basically become an interventionist. >> it becomes plural, don't fight the feds. >> we'll steal that one. thanks. 15 minutes before the closing bell. dow jones lower by 23.
3:46 pm
nasdaq lower by 23 as well. >> facebook users beware what you post on the website could end up costing you your job. that's next. we may number the middle of a heated presidential race, but there's finally something both parties are agree on. has too do with the threat in china. details later on the "closing bell." [ male announcer ] at scottrade, we believe the more you know, the better you trade. so we have ongoing webinars and interactive learning, plus, in-branch seminars at over 500 locations, where our dedicated support teams help you know more so your money can do more. [ rodger ] at scottrade, seven dollar trades are just the start. our teams have the information you want when you need it. it's another reason more investors are saying...
3:47 pm
[ all ] i'm with scottrade.
3:48 pm
3:49 pm
could what you post on facebook actually cost you your job? the answer is, yes, absolutely. but as of now, a uniform set of social media rules has not been set. >> no, but today the national labor relations board set out to define what types of social media should be covered by national labor relations act, which can get you fired. >> according to the board, employee posts on social media sites are protected if they relate to working conditions or wages, but some employers are going so far as to make employees sign an agreement promising not to post negative comments about the company. which seems reasonable. >> super complicated, isn't it? i think it's reasonable, too.
3:50 pm
you wok for a corporation or a company, and you can expect that you shouldn't be posting about them on your facebook page. >> yeah but if you're a whistle-blower, for example, i can see how that should not be banned, obviously. if you're complaining about terrible working conditions or perhaps even your wages, maybe that's grounds for a public forum release, but otherwise, disparaging your company in a public place like social media? >> it doesn't seem very bright, does it? >> i think if you did that and you got fired and were surprised -- >> you shouldn't be shocked. >> -- you probably have other issues we need to talk about. >> exactly. up next we're back with the closing countdown. [ male announcer ] what if you had thermal night-vision goggles,
3:51 pm
3:52 pm
like in a special ops mission? you'd spot movement, gather intelligence with minimal collateral damage. but rather than neutralizing enemies in their sleep, you'd be targeting stocks to trade. well, that's what trade architect's heat maps do. they make you a trading assassin. trade architect. td ameritrade's empowering web-based trading platform.
3:53 pm
trade commission-free for 60 days, and we'll throw in up to $600 when you open an account. we've been holding onto modest decline. markets aren't doing much as we wait for earning season to kick off tomorrow after the bell with alocoa. >> dow is lower by 20 points. nasdaq is lower by 22. not often you see those two major averages moving about the same in terms of points.
3:54 pm
percentagewise the nasdaq getting hit harder today by 0.75, compared to the s&p only down 4 1/2 points. >> apple is certainly weighing on the nasdaq. hewlett-packard not helping a technologies case, even as ubs comes out and says the best strategy for that company at this point is just breaking it up into two separate companies. it is time now, as we said, for the closing countdown. >> back with us is sam stovall, peter costos, cnbc analyst. why the decidedly negative, slightly negative tone? >> two reasons. one, everybody is out on broadway getting zeplers for the columbus celebration. >> do people know what that is? >> deep fried dough with a little powdered sugar. >> keep talking. >> getting hungry, right? that's what i do, i bring food. kenny sits here with brings
3:55 pm
recipes, i bring you real food. >> low volume because of the holiday. >> no one doing anything. i think it's just a rest and market's taking a little rest. i think we're waiting for tomorrow, the rest of the week. >> earnings tomorrow? >> yeah, waiting for earnings. i don't think anything driving anybody to do anything today. >> now it becomes a show me market. we've gotten as far as we can. slightly below that 4 1/2 year high for the s&p 500. now if we take that next leg higher, earnings have to be a lot better than people think they're going to be. >> or at certainly the guidance has to confirm maybe the third quarter is the trough. i think it's sort of a wait and see market. as you said, basically you can correct not only in price but also in time. so, if we end up sort of trading sideways for a while, that acts as a correction, which could give us the pause to allow us to work our way higher as the year progresses. >> do you have any thoughts on apple, the way it -- look at the nasdaq today. worst performer because of
3:56 pm
apple. your thoughts on that and its dominance on a major average, a, good or bad, b, do we beat occupy it too much when things go slightly wrong? >> well, i wouldn't say necessarily say it's good or bad. it is what it is. it also makes the case for the equally waited indices. the large cap 500, mid-cap 400, efa, emerging markets. interestingly enough, the equally waited indices are outperforming their cap-weighted bench marks mainly because everybody is the same size and you don't have the dominance of one company that could drag you down. >> peter, it's been the most telegraphed market for the last couple of months in that mondays have tenned to be down. it's like 19 of the last 20 or 22, and slowly the market climbs that wall or worry. >> that's actually a great trading pattern but i wouldn'tment to use that for a career. any time somebody tries to trade
3:57 pm
off a pad earn littern that doe any sense -- not that anything in this market makes a lot of sense -- but you end up losing a lot of money. >> i'm not saying employing that strategy -- >> people do it. >> it's a pattern and it's unmistakabl unmistakable. >> after the eighth or ninth week in a row, i heard people saying, you buy on this dip because tuesday and wednesday are going to be positive. they were right. how long does anything like that last. i mean, it's all about earnings. you know, i -- can't reiterate it enough. it's very important we focus on, to me, what this market is all about. >> you know what i am so thrilled about, what we have not mentioned. >> i know. >> europe! >> thank you. >> angela merkel is in greece tomorrow. it's going to be one of the ugliest days ever. it's going to be very tough. have we finally gotting that yoke off the u.s. market? is the ecb taking care of that problem so we can pay attention to u.s. markets? >> no, it just means i'm paying
3:58 pm
attention to and you you won't ask me anything about greece. >> i know. >> i think what it's saying is right now the ecb has said it's going to be doing what it can. the political leaders are saying, okay, we're going to work our way together to make sure that we can do that. so, i think they are more on the back burner because our presidential election and our earning cycle is really what people are focusing on now. >> michele makes a good point earlier when she talks about apple. it really is, as goes apple, as goes the stock market. that's the way it's worked lately. apple has gone consistently higher as the market has managed to move higher as well. >> it's traditionally always been a stock that's a bellwether stock. general electric at one point was, i mean, there's always a company that's going to be a leader. apple -- >> suggest a bellwether, this is a huge, massive bomb, right? >> the other thing is, somebody brought this up to me a long time ago. any time a company becomes so
3:59 pm
important to the u.s. economy or to the u.s. markets, something happens where either the government sits there and starts an antitrust -- i'm not saying apple will because they don't have it. every company has had something come up to it where they've broken it up or broken it back. at&t was broken up. microsoft -- i don't know -- >> when you're the tallest nail in the room, right, somebody's got a hammer. >> absolutely. i'm not saying that's going to happen to apple but it has happened in the past. >> you're dealing with a company that literally moves gdp, right? i mean, it's that significant, sam, what apple does. >> it and the three other tech stocks in the s&p that are the largest are larger than 200 stocks in the s&p. so you just get those three tech stocks -- those four tech stocks to do something good or bad and drags everybody else with it. >> i don't know about my sense of morality but it used to financials and it's not anymore. is that good? >> we see the rotation. it used to be the energy

tv
Closing Bell
CNBC October 8, 2012 3:00pm-4:00pm EDT

News/Business. Maria Bartiromo, Bill Griffeth. A guide through the most important hour of the Wall Street trading day. New. (CC) (Stereo)

TOPIC FREQUENCY S&p 11, Columbus 7, Mario Gabelli 6, Europe 4, Apple 4, California 3, China 3, Darden 3, Scottrade 2, Sam Stovall 2, Mario 2, Alocoa 2, Hp 2, Max 2, Kodak 2, Schwab 2, Nyse Euronext 2, Eswar 2, Greece 2, Sam 2
Network CNBC
Duration 01:00:00
Scanned in San Francisco, CA, USA
Source Comcast Cable
Tuner Virtual Ch. 58 (CNBC)
Video Codec mpeg2video
Audio Cocec ac3
Pixel width 528
Pixel height 480
Sponsor Internet Archive
Audio/Visual sound, color


disc Borrow a DVD of this show
info Stream Only
Uploaded by
TV Archive
on 10/8/2012
Views
86